Modified AGI Limit For Traditional IRA Contributions Increased
For 2007, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified adjusted gross income (AGI) is:
-
More than $83,000 but less than $103,000 for a married couple filing a joint return or a qualifying widow(er),
-
More than $52,000 but less than $62,000 for a single individual or head of household, or
-
Less than $10,000 for a married individual filing a separate return.
For 2007, if you are not covered by a retirement plan at work, your deduction for contributions to a traditional IRA may be reduced (phased out) if you either live with your spouse at any time during 2007 or file a joint return for 2007. If you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work but you are not, your deduction is phased out if your adjusted gross income (AGI) is more than $156,000 but less than $166,000. If your AGI is $166,000 or more, you cannot take a deduction for contributions to a traditional IRA.
Rollover By Nonspouse Beneficiary
Beginning in 2007, a direct transfer from a deceased employee's IRA, qualified pension, profit-sharing or stock bonus plan, annuity plan, tax-sheltered annuity (section 403(b)) plan, or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. The IRA is treated as an inherited IRA.
Catch-up Contributions In Certain Employer Bankruptcies
For 2007, 2008, and 2009, you may be able to deduct catch-up contributions of up to $3,000 each year to your IRA. These contributions would be deductible only if you participated in a qualified cash or deferred arrangement (section 401(k) plan) of an employer who was a debtor in bankruptcy proceedings.
